Advertising

Spot the eyeball

For advertisers, sports events need not be such a lottery

AS TELEVISION channels proliferate and audiences fragment, sports events have unparalleled pulling power. This year's main events are the American Superbowl, which averaged 93m viewers when it took place in February, and Europe's Champions League football final, which takes place in Athens on May 23rd. Last year's final attracted an average audience of 86m people; similar figures are expected this year, when AC Milan takes on Liverpool.

All those eyeballs should make advertisers cheery. But some will end up happier than others, because the audience grows and shrinks during the game. By looking at several years' data for English club-football games, researchers at London's Tanaka Business School and Initiative Sports Futures, a consultancy, found that the expected outcome of a game as the match unfolds influences the number of viewers. The less certain the outcome, the more people stay tuned. If the result seems a foregone conclusion, people switch off.

A good example was the 2005 Champions League final, also between AC Milan and Liverpool (see chart). With Liverpool losing heavily, many viewers switched off at halftime. Its unlikely second-half fightback, and eventual victory on penalties, was accompanied by a near-doubling in the number of viewers.

Broadcasters can capture some of this variation by charging advertisers on the basis of viewing figures. But ratings-based fees are retrospective and advertisers have to decide where to spend money ahead of time. Tanaka's Stefan Szymanski thinks there is an argument for “contingent” pricing, whereby advertising slots for sporting events would be pre-auctioned, with bids depending on the score at each point in the game.

Perimeter advertising—the electronic signs around the edges of the football pitch—would be particularly suited to this model. It is sold in time segments and is visible during the action, when viewers are most engaged. Kevin Alavy of Initiative Sports Futures reckons contingent pricing is still some years away, so his advice to clients is to buy perimeter advertising in the last few minutes of the game, when goals are most likely. Replays, highlights and press photos of goals can then ensure wide exposure for winning advertisers.